Harley-Davidson Financial Issues $302 Million ABS

16-hd-v-rod-muscle-3-largeHarley-Davidson Financial Services has come to market for the first time this year with a $302 million securitization backed by prime motorcycle loans, according to a presale report from Moody’s Investors Service.

The loans in the Harley-Davidson Motorcycle Trust 2016-A have an average Fico of 751, an average original term of 70 months, and a weighted average seasoning of eight months, according to the report. Also, 76% of loans in the trust were for new motorcycles, while 24% were for used.

This shows a large difference from HDFS’s 2015-2 issuance of $500 million, which was backed by loans with an average Fico score of 711, an average original term of 73 months, and a weighted average seasoning of seven months.

The contracts in the 2016-A trust were originated by Eaglemark Savings Bank — a wholly-owned subsidiary of Harley-Davidson Credit Corp. (HDCC).

HDFS’s serviced portfolio grew modestly to 465,455 contracts totaling $5.6 billion as of Dec. 31, 2015, from $5.2 billion a year earlier, according to Moody’s.

“HDCC’s managed portfolio performance has deteriorated slightly in the recent years,” Moody’s wrote in the report. The net loss of the managed portfolio was 2% in 2016 compared to 1.6% the year prior. “Though weakness in performance of managed portfolio is a concern, the increase in losses are minimal and are in line with the industry trends.”

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